When DTC is informed by the issuer or its agent that a tax relief opportunity exists on an upcoming income payment, DTC notifies participants. The DTC announcement includes the timeline for electing for tax relief and the various tax relief entitlements for different investor types.
Elections for tax relief are submitted electronically to DTC to receive income payments exempt from foreign tax, at a reduced rate of withholding, or at the statutory tax rate. The TaxRelief window opens on the day after record date and remains open for a number of days thereafter, during which participants may view, enter, modify or delete certifications up to the security's instruction cutoff date.
For relief-at-source payments, participants and their customers receive in one transaction simultaneous payment of the income and the associated tax relief. For accelerated refunds, participants receive their customer's tax relief entitlement subsequent to the initial dividend payment through DTC's cash settlement system.
DTC also provides DTC TaxInfosm (TaxInfo) as a source for international tax withholding and relief entitlement information. Participants can easily access DTC TaxInfo directly from within the TaxRelief function.